The global market is swiftly evolving, and investors and CEOs are increasingly concerned that their legacy businesses are not up to scratch amid digital disruption and an altering geo-political landscape. As exemplified by investors and executives prioritising digitalisation over diversification efforts, difficulties arising from this often see businesses pushing for short-term results at the expense of long-term goals such as diversity.

A stronger focus on long-term strategies benefits a host of parties, from employees to investors. However, investors are also instinctively pushy when it comes to wanting instant gratification, creating headaches for companies who are often forced into a double bind.

New analysis from accounting and consulting firm PwCexplores current challenges faced by investors and CEOs in relation to wider market condition, as well as changes in dynamics in imperatives for companies. The study is based on a survey of 663 investment professionals in 96 countries and 1,293 CEOs around the world.

Short termism

According to the Big Four firm’s analysts, investors appear to be the first to say that they agree or strongly agree that companies face increasing pressure to deliver business results under shorter timeframes, at 69% of respondents, while 60% of CEOs agree with them. Short termism remains a key barrier to long-term value creation, while also having other negative impacts, from asset stripping to reputational damage.

Following the financial crisis, with its massive social damage, holding leaders to account is increasingly on the agenda for regulators and the wider public. Recent research from Strategy& found that UK CEOs are now unlikely to last beyond a shelf-life of five years, and PwC’s report further supports this cliam, with 63% of investor respondents and 59% of CEO respondents agreeing or strongly agreeing that there is increased pressure to hold individual leaders accountable for any organisational misconduct.

Respondents were also asked about how trust is being built with customers. Cyber security was top rated among investors, at 64% of respondents, whereas it was cited by 47% of CEOs as a driver of trust. The negative impact on reputation continues to be a significant risk for businesses. The GDPR is also impacting businesses, with concern among 57% investors and 44% of CEOs around creating transparency in the usage and storage of customer data.

Transparency is an issue in a variety of other functional areas, with CEOs (50%) keen to create transparency about aspects of the organisation’s business strategy, while 40% say that they want to create transparency around the taxes they pay.

Diversity

Business and investors are less concerned about key issues, such as contributing to combating environmental issues such as climate change – even if these issues could sink their businesses in the long-term. Inclusion and diversity promotion also score below 50% for both groups.

Aside from trust, disruption too is on the forefront of the minds of investors and CEOs alike. The S&P 500 has seen significant change over the past two decades, with around half of companies that belonged to it in 2000, no longer doing so. Technology, globalisation and changes in consumer behaviour have dealt massive blows, while propelling startups to top market positions.

Investors (85%) remain wary of changes in core technologies of production or services provision, from robotics to blockchain technologies, with CEOs slightly less concerned (64%). Changes in consumer behaviour is also cited as a key area of concern, in the face of new demographics and understanding, at 81% of investors and 69% of CEOs. Regulation is seen as a lesser concern, cited by 54% of investors and 63% of CEOs.